India SME Forum (ISF), a non-profit, non-governmental association representing small and medium enterprises in India, hosted a fireside chat with Mahesh Jaising, Partner – Indirect Tax, Deloitte, moderated by Vinod Kumar, President, ISF, to share insights on Budget 2023 and its impact on MSMEs.
MSMEs contribute to about one-third of the country’s economy and will play a very critical role in India’s journey towards achieving PM Modi’s objective of becoming a USD 5 trillion economy by 2025. The government in the Union Budget 2023-24 has given a boost to the MSME sector through the revamped credit guarantee scheme that will enable higher credit flow and simplify compliances.
Speaking at the session, Jaising said, “The Union Budget 2023-24 focuses on three primary things, enabling ease of doing business for MSMEs, addressing working capital challenges, and creating more opportunities for small sellers to access the manufacturing space.” Platforms like e-commerce are enabling MSMEs to have access to customers beyond the immediate local borders, reducing entry barriers for international markets, creating more jobs, and ultimately, contributing towards the government’s vision of Digital India. He also highlighted, “Going online will enable small sellers to have a level playing field. The government’s Digital India push will be a huge jump for the MSME sector to move beyond its immediate customer base and get the power of outreach that the online platforms provide.” amend section 43B of the Income Tax act.
Kumar also shared similar views, stating, “In the Union Budget 2023, the government has taken progressive steps to amend section 43B of the income tax – this is a welcome move that will help MSMEs with ease of doing business. Additionally, the government’s decision to exempt online sellers with less than 40 lakhs turnover will be a huge boost for MSMEs adopting e-commerce.” As per the GST@5 Survey 2022 by Deloitte, about 90% of industry leaders feel that GST has addressed the business barriers across the country.
Reforms such as automation of tax compliances and introduction of e-invoicing/e-way facility are the most beneficial. It has not only positively affected the prices and costs of goods and services for consumers but has also helped businesses optimize their supply chains. However, there is a need for a simplified tax regime to promote the ease of doing business and upgrade technology to facilitate auto population of tax returns.